Import Duty vs VAT/GST: What's the Difference & Who Pays?

When shipping internationally, two separate charges apply at customs: import duty and VAT (or GST). They are calculated differently, collected by different parties, and the recipient is usually responsible for both. Understanding the distinction helps you set accurate cost expectations with your customers or recipients.

Import Duty

Import duty (also called customs duty or tariff) is a tax collected by the destination country's customs authority on imported goods. The rate is determined by the product's HS code and country of origin. Rates typically range from 0% to 30% of the shipment's declared value, though some product categories (like electronics in Brazil) can be higher.

VAT / GST

Value Added Tax (VAT) or Goods and Services Tax (GST) is a consumption tax applied on top of the customs duty. Most countries with VAT/GST apply it to imports. Common rates: UK 20%, Germany 19%, Australia 10%, India 18%, UAE 5%.

Who Pays?

In most cases, the recipient (importer) pays both import duty and VAT/GST when the shipment arrives. Some shipping terms (DDP — Delivery Duty Paid) shift this responsibility to the sender. ShipPrio shipments default to DDU (Delivery Duty Unpaid), meaning the recipient pays duties and taxes at the destination.